Oil prices climb on prospects for deeper OPEC+ output cuts

Oil prices edged higher on Thursday, as investors hoped the world’s biggest producers would cut output more, while they largely shrugged off forecasts of slumping demand due to the coronavirus outbreak in top oil importer China.

Brent crude LCOc1 was up 58 cents, or 1.04%, at $56.37 a barrel by 12:20 p.m. ET, while U.S. West Texas Intermediate (WTI) CLc1 was up 40 cents, or 0.8%, at $51.57 a barrel. U.S. gasoline futures RBc1 jumped more than 1%, supported by outages at Exxon Mobil Corp’s 502,500 barrel-per-day (bpd) Baton Rouge, Louisiana and at Phillips 66’s 285,000-bpd Bayway refinery in Linden, New Jersey.

The Organization of the Petroleum Exporting Countries lowered its 2020 demand forecast for its crude by 200,000 bpd, prompting expectations the producer group and its allies, known as OPEC+, could cut output further. Oil demand in China, the world’s second-largest crude consumer, has plunged because of travel restrictions and quarantines.

Hubei province, the center of the outbreak, said on Thursday the number of new confirmed cases there jumped by 14,840 to 48,206 on Feb. 12 and that deaths climbed by a daily record of 242 to 1,310. The International Energy Agency (IEA) expects oil demand in the first quarter to fall for the first time in 10 years before picking up from the second quarter. The agency cut its full-year global growth forecast to 825,000 bpd.